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The Macroeconomic Impact of Skilled Emigration from South Africa: A CGE Analysis

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  • Heinrich R Bohlman

Abstract

South Africa faces the dual problem of large inflows of illegal immigrants and outflows of skilled emigrants. This situation potentially has serious implications for the domestic labour market and economy as a whole. In this paper we measure the impact of skilled emigration and the subsequent loss in primary factor productivity on the South African economy using a dynamic computable general equilibrium (CGE) model. Results indicate that skilled emigration in the absence of any programmes to counter this flow of workers has a generally negative effect on the economy. Industries with the greatest exposure to the investment and export sectors as well as those with the highest concentration of skilled workers are shown to be most affected. We also use simple and intuitive back-of-the-envelope equations to enhance our understanding of the mechanisms driving the model’s macroeconomic results. These results justify the government’s current efforts to retain and attract skilled labour as part of the ASGISA framework.

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  • Heinrich R Bohlman, 2010. "The Macroeconomic Impact of Skilled Emigration from South Africa: A CGE Analysis," Working Papers 166, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:166
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    File URL: http://www.econrsa.org/node/189
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    Cited by:

    1. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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